Then there's the question of how Japan powers itself amid the backlash against nuclear energy following the meltdown of Fukushima nuclear reactors. The reactors melted after a powerful earthquake and tsunami in March last year.

Abe's party has called for safety tests on all nuclear plants over the next three years. Those that pass should be brought back online, he has said.

He'll also have to deal with the enduring task of cleaning up communities shattered by the earthquake and tsunami, and contend with local anger that the recovery seems to have stalled.

Former Prime Minister Yoshihiko Noda stepped down as party president after exit polls showed a smashing loss in lower house voting. His Democratic Party of Japan, once seen as a breath of fresh air, was considered increasingly ineffective.

Noda conceded defeat in parliamentary elections, signaling the return to power of the conservative Liberal Democratic Party that ruled the country almost continuously since its establishment in 1955. It was forced from power three years ago by Noda's party.

Abe is inheriting a struggling economy, regional tensions and questions over Japan's role in Asia.

"The economy is at the bottom. It's our first mission to turn it around," he said.

The new prime minister said though he plans to take a strong stand with China and its other neighbors, he also seek to improve relations with Beijing.

Since assuming power last year, the outgoing prime minister struggled to contend with the country's economic struggles.